President Joe Biden on Friday rolled out new proposals aimed at lowering health care costs and taking on so-called “junk fees” in the medical industry.

It comes as the president continues an all-out effort to sell the public on his economic agenda, dubbed “Bidenomics.”

What You Need To Know

  • President Joe Biden on Friday announced new proposals aimed at lowering health care costs and taking on so-called “junk fees” in the medical industry

  • Among the newly proposed steps will be a crack down on short-term health insurance plans — the new rule would require such plans to limit coverage to three months with a potential one-month extension
  • This is the administration’s latest announcement targeting what Biden calls "junk fees;" Last month, several major companies committed to increasing price transparency during a roundtable at the White House.

Among the newly proposed steps will be a crack down on short-term health insurance plans, what the administration is calling “junk insurance.”

“In America, it sounds corny, but fairness is something we kind of expect,” Biden said while delivering remarks on the initiatives at the White House. “And I don’t know anybody who likes being viewed as having been played for a sucker, taken advantage of.”  

The new rule would require such plans to limit coverage to three months with a potential one-month extension, drawing back a move by former President Donald Trump’s administration to allow short-term plan coverage for 12 months with a maximum duration of three years.

“Short term plans are intended to provide temporary coverage as people transition from one source of coverage to another, like when we're between jobs,” White House Domestic Policy Advisor Neera Tanden told reporters on a call Thursday previewing the announcement. “Under the previous administration, however, companies were allowed to take advantage of loopholes and sell what we call 'junk insurance' for much longer than intended.”

Tanden argued consumers often do not realize these plans can limit what and how much they cover, which “leaves patients footing the bill, often thousands of dollars worth of surprise charges.” Biden on Friday called it “outrageous.”

The proposed rule would also require more transparency, requiring plans to disclose the limits to their coverage, including when it comes to pre-existing conditions. The changes will go through a public comment period before it could be finalized “later this year,” according to senior administration officials.

“I didn’t know some of this,” Biden said to laughs from the audience on Friday. “I thought I knew a hell of a lot about health care.”

The administration will also issue guidance on medical billing, emphasizing, under federal law, plans and providers are not allowed to contract with hospitals and claim they are not “in-network.” The White House argues that leaves consumers paying higher bills for a hospital visit.

“Frankly, what they are doing is gaming the system,” Tanden said. “This is not allowed and as our guidance will describe, it must end.”

“Evading the law and playing games to charge patients outrageous prices has to end. It has to end,” Biden said.

The Consumer Financial Protection Bureau, Department of Health and Human Services and Treasury Department will also team up to release a Request for Information on the practice of signing patients up for medical credit cards and loans, which the White House says could include teaser rates and deferred interest features and evade certain consumer protections.

“Healthcare providers may be operating outside of existing consumer protections because once medical bills are placed on medical credit cards, there may be gaps in how various consumer protections apply,” Tanden said. “Consumers may not fully understand the risks associated with these products.”

The administration is also touting new research showing the impact of Biden’s $370 billion Inflation Reduction Act, which passed Congress along party lines in August of last year. When the $2,000 out-of-pocket prescription drug spending cap takes effect in 2025, nearly $19 million seniors will save about $400 per year, according to the White House.

Biden on Friday said on Sept. 1 he will announce the first 10 drugs selected for negation under the plan laid out in the Inflation Reduction Act for Medicare to negotiate prices with drugmakers. Multiple companies have filed lawsuits in federal courts over the plan.

“We are going to keep standing up to Big Pharma,” Biden said on Friday.

Biden traveled to Chicago last week to debut his “Bidenomics” branding before heading to South Carolina on Thursday to talk about a new clean energy manufacturing deal.

This is the administration’s latest announcement targeting what Biden calls “junk fees.” Last month, several major companies committed to increasing price transparency during a roundtable at the White House.